Global base oils – week of Aug 29: Demand outlook

· Global economic slowdown curbs lubricants demand.

· US market signals stay mixed.

· US braces for sustained rise in interest rates.

· US’ flash PMI falls in August to lowest since 1H 2020.

· US August consumer confidence rises to three-month high.

· US weekly gasoline demand fell last week for 21^st straight week.

· Atlantic hurricane season unusually quiet so far, heads into peak period.

· Brazil/Argentina’s stalling July lube demand reflects growing impact of cost pressures.

· Energy crisis in Europe intensifies, prompting industry/consumer cut-backs.

· Europe faces prospect of power cuts over winter amid energy shortage.

· UK’s energy price cap to rise by 80pc in October.

· Europe’s flash August PMI falls further in August.

· Italy’s July industrial oils demand slides, highlighting impact of slowing factory activity.

· European base oils demand typically gets seasonal boost at end of summer holidays as blenders replenish stocks.

· Any boost likely to be smaller than usual amid falling prices, prospect of lower consumption.

· Asia demand stays more mixed, energy shortage extends to China.

· Asia-Pacific base oils producers increasingly adapting to sustained slowdown in Chinese demand, targeting other markets.

· China’s base oils demand/imports shows signs of improving vs July, but still low.

· Chinese demand typically gets seasonal boost in September.

· China’s car sales extend rise throughout August.

· Pakistan’s demand for base oils imports could face pressure from slower lube consumption/healthy stocks.

· Thailand sees seasonal slowdown in domestic lube demand in Q3.

· India’s firm Group II/III imports during monsoon season point to on-going steady flows, curb need to replenish low stocks.

· Firm import volumes point to healthy end-user demand even ahead of/during peak season in Q4.

· India’s demand for very-light grade base oils could get some support following recent recovery in retail diesel premium to base oil prices.